Seattle’s Minimum Wage Hike Hurts Workers
“Seattle’s minimum wage increased to $20.76 per hour”
https://reason.com/2025/01/06/seattles-minimum-wage-hike-hurts-workers/
Tag: wages
No, California’s $20 Minimum Wage for Fast-Food Workers Did Not Create Jobs
“If minimum wage increases were a drug, governments would have to conduct trials and monitor adverse effects afterward. That’s what happened in Seattle when it raised the minimum wage in 2014. The city called for proposals to study the impact on actual workers earning below the minimum before the law. The Evans School of Public Policy and Governance at the University of Washington was the only volunteer. Its researchers found that the law didn’t cause an increase in layoffs among workers who had previously earned below minimum wage, but it did reduce their hours by an average of 7 percent. That was partly offset by a 3 percent increase in hourly pay for the hours they did work. On net, the law cost these workers an average of $888 per year.
That amount is significant in itself, but it’s important to consider that it accounts for only the short-term effects. As mentioned above, some layoffs and hour reductions will happen immediately, but others—such as more businesses closing and fewer opening, or automation and other changes reducing employment—can take years. Another point is that the workers who benefited from higher pay were the ones most likely to have risen out of the minimum wage ranks to the middle class even without a mandated increase, while the workers who lost much more than $888 per year are more likely to be the ones blocked forever from economic advancement. In fact, the paper found that the workers who benefitted net were the most experienced and highest paid among the group–earning more than the old minimum but less than the new–while the less-experienced workers earning the old minimum or close to it, lost considerably more than the average.
Seattle legislators must have been unhappy with those findings because they cut funding for the Evans School and reached out to the same group at U.C. Berkeley that did the California minimum wage study to do its own distorted analysis, which was rushed out a week before the Evans study was made public. Eventually, Seattle raised the minimum wage again.”
https://reason.com/video/2024/12/19/no-californias-20-minimum-wage-for-fast-food-workers-did-not-create-jobs/
US teacher strikes were good, actually
“Previous research on teacher strikes in Argentina, Canada, and Belgium, where work stoppages lasted much longer, found large negative effects on student achievement from teacher strikes. (In the Argentina study, the average student lost 88 school days.)
In contrast, the researchers find no evidence that US teacher strikes, which are much shorter, affected reading or math achievement for students in the year of the strike, or in the five years after. While US strikes lasting two or more weeks negatively affected math achievement in both the year of the strike and the year after, scores rebounded for students after that.
In fact, Lyon said they could not rule out that the brief teacher strikes actually boosted student learning over time, given the increased school spending associated with them. A recent influential meta-analysis on school finance found that increasing operational spending by $1,000 per student for four years helped student learning.
It’s possible higher wages could reduce teacher burnout, or the need to work second jobs, leading to improved performance in the classroom. Still, Lyon explained, it’s also possible that increased spending on teachers would not lead to higher student test scores, if wage gains went primarily to more experienced teachers, or to pensions, or if teachers were already maximizing their effort before the strike.”
https://www.vox.com/education/368756/teachers-school-unions-labor-education-students-strikes
California’s Minimum Wage Law Has Led Some Employers To Cut Hours and Hike Prices
“Last September, California Governor Gavin Newsom (D) signed a bill mandating a $20 minimum wage for fast food workers. The new wage is among the highest in the county, surpassing even Washington, D.C.’s $17.50 minimum wage. While supporters touted the wage increase as a way to help struggling Californians, detractors warned that restaurant owners would respond by laying off workers, cutting their hours, or speeding up the already starting shift to automation.
The law went into effect in April, meaning that it’s likely too early to tell what the ultimate effects of the law will be. However, a recent report from the Associated Press detailed concerns from several California fast food restaurant owners who say they’ve been forced to reduce hours and hike food prices.
“We kind of just cut where we can,” Lawrence Cheng, whose family owns several Wendy’s franchises told the A.P. “I schedule one less person, and then I come in for that time that I didn’t schedule and I work that hour.”
Juancarlos Chacon, who owns nine Jersey Mikes locations in Los Angeles told the A.P. that he’s resorted to reducing staff, cutting his part-time workers by about 20 employees. He’s also had to raise prices. A turkey sub, for example, that used to be under $10 now costs $11.15. As a result, the amount customers spend, he says, has been falling.
“I’ve been in the business for 25 years and two different brands and I never had to increase the amount of pricing that I did this past time in April,” he told the A.P.”
https://reason.com/2024/07/10/californias-minimum-wage-law-has-led-some-employers-to-cut-hours-and-hike-prices/
California fast-food franchise owners, consumers feel brunt of minimum wage hike
California fast-food franchise owners, consumers feel brunt of minimum wage hike
https://finance.yahoo.com/news/california-fast-food-franchise-owners-consumers-feel-brunt-of-minimum-wage-hike-174515934.html
California’s $20 Fast Food Minimum Wage Law Is Already Having Disastrous Unintended Consequences
“if it’s win-win, why just make the minimum $20? Why not $30? Or $100?
Because government requiring higher wages is not a win-win.
Interfering with market prices always creates nasty unintended consequences.”
…
“No. 1: Thousands of Californians have already lost jobs because some restaurants closed. Others lost income because their employer cut worker hours. The chain El Pollo Loco cut employees’ hours by 10 percent.
Pizza Hut announced that they will lay off more than a thousand delivery drivers. One such driver, Michael Ojeda, understandably asked, “What’s the point of a raise if you don’t have a job?”
No. 2: Workers who still have jobs will lose them because now their employers have more incentive to automate. Chipotle just created a robot that makes burrito bowls. Even CNN acknowledged, “Some restaurants are replacing [fast food workers] with kiosks.”
No. 3: Prices go up.”
https://reason.com/2024/05/29/californias-20-fast-food-minimum-wage-law-is-already-having-disastrous-unintended-consequences/
California’s New Minimum Wage Is Predictably Killing Food Delivery Jobs
“A new California law will require that most food-service workers get paid at least $20 per hour starting next year.
But hundreds of pizza delivery drivers in the Los Angeles area are about to discover Thomas Sowell’s famous adage that the true minimum wage is zero.
Pizza Hut announced Wednesday that it would lay off about 1,200 delivery drivers in Los Angeles, Orange, and Riverside counties, CBS News reported. Pizza Hut franchises are outsourcing delivery to third-party apps like GrubHub and UberEats as a cost-saving measure in advance of the new law taking effect.”
https://reason.com/2023/12/27/californias-new-minimum-wage-is-predictably-killing-food-delivery-jobs/
When it comes to the economy, everything’s great and no one’s happy
“wages aren’t as fluid as, say, gas prices, which seem to jump up or down in an instant. There are reasons for this. Gas prices are easily observed and easily changed, and people will happily switch stations to save a few cents per gallon. Labor markets aren’t like this at all. Switching jobs takes time and effort, and many workers are reluctant to give up the devil they know for the devil they don’t. Employers capitalize on this situation by adjusting wages slowly, if at all.”
…
“High inflation, combined with slow wage adjustment, drives purchasing power down. And this is true not just for the US. Canada’s post-Covid pay has followed the same trajectory as ours, and it is not alone.”
…
“To climb out of this hole, real wages will have to start growing again. The good news is that they already have. Annual real wage changes turned positive in February; month-on-month changes turned positive late last year. In this respect, we are doing well. Most European economies still haven’t seen real wage growth.
Furthermore, this hole is shallower than it may seem. Since late 2020, real wage reductions have cost households a little less than $1 trillion. That is a lot, without a doubt, but it is less than half of what households received in Covid-related transfers — stimulus payments, expanded unemployment insurance, child care credits, and the like — which amounted to $2 trillion. That puts them well ahead of where they were in March 2020, which is why people report that their own finances are doing just fine, even while they trash the state of the economy.”
…
“What we need to free ourselves from is the preconception that low unemployment alone makes a good labor market. Where we actually are is simple to understand. Dollar wages adjust slowly to price increases. Inflation has raised prices a lot, reducing purchasing power. As a result, the public is not happy about the economy.”
Historic gains: Low-income workers scored in the Covid economy
https://www.politico.com/news/2023/05/29/low-income-wages-employment-00097135
Biden’s Nominee for Secretary of Labor Wants ‘Wage Theft’ Cops
“”Wage theft” is a catch-all term for not paying workers what they are owed under the law, such as violating minimum wage or overtime regulations. It is a crime under the Fair Labor Standards Act and is enforced by the Labor Department’s Wage and Hour Division. It can involve business owners sneakily ripping off employees. It can also result from honest confusion or mistakes regarding what is owed.”